Guaranty - CoActive Marketing Group Inc. and PNC Bank NA
GUARANTY
GUARANTY (this "Guaranty") made and entered into as of February 11,
2000 by CoActive Marketing Group, Inc., (formerly known as Inmark Enterprises,
Inc.), a Delaware corporation (the "Guarantor"), in favor of PNC Bank, National
Association, a national banking association, ("Lender").
PRELIMINARY STATEMENT
Pursuant to the Loan Agreement dated as of March 31, 1998, and as
amended on December 29, 1998, January 14, 1999, June 29, 1999, November 19, 1999
and the date hereof, by and among Guarantor, U.S. Concepts, Inc., a Delaware
corporation ("USC"), Inmark Services, Inc., a Delaware corporation ("Services"),
Optimum Group, Inc., an Ohio corporation (formerly OG Acquisition Corp.) ("New
OGI") and together with Services and USC, the "Borrower") and Lender (as
amended, supplemented or otherwise modified from time to time, the "Loan
Agreement") (Guarantor, USC, Services and New OGI are collectively referred to
herein as the "Inmark Group"), Lender has agreed to waive the non-compliance of
Borrower with the December 31, 1999 Minimum EBITDA requirement under Section 6.1
of the Loan Agreement (the "Waiver") on the terms and subject to the conditions
set forth therein.
The Guarantor owns 100 percent of the issued and outstanding equity
securities of USC and 100 percent of the issued and outstanding securities of
Services. Services in turn owns 100 percent of the issued and outstanding equity
securities of New OGI. The Waiver will be of substantial benefit to the
Guarantor, as Lender will not pursue any available remedies in light of the
Borrower's default. The Waiver is conditioned upon, among other things, the
execution and delivery by the Guarantor of this Guaranty.
AGREEMENT:
1. Definitions. Unless otherwise defined herein or unless the context otherwise
requires, all capitalized words and terms used herein shall have the respective
meanings and be construed herein as such words and terms are defined or
construed in the Loan Agreement.
2. Guaranty.
(a) The Guarantor hereby absolutely, unconditionally and irrevocably
guarantees to Lender the prompt and full payment and other performance of all of
the Obligations of Borrower (the "Relevant Obligations") when each of such
Relevant Obligations is due (whether at a specific due date, at the stated
maturity, by acceleration or otherwise). The Guarantor further agrees to pay any
and all reasonable costs and expenses (including, reasonable attorney's fees and
expenses) which may be paid or incurred by Lender in enforcing any of its rights
under this
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Guaranty. The agreements and other obligations of the Guarantor under this
Guaranty (i) shall be absolute, unconditional and irrevocable, irrespective (by
way of example only) of the validity, legality or enforceability of any Loan
Document, in whole or in part, or of the existence, value or condition of any of
the Collateral, and (ii) shall be continuing and remain in full force and effect
until the indefeasible payment in full and other full performance of all of the
Relevant Obligations and the full payment and other performance of the
Guarantor's other obligations contained in this Guaranty.
(b) Without limiting the other provisions of this section 2, the
agreements and other obligations of the Guarantor under this Guaranty shall not
be affected, modified or in any other manner impaired upon the happening, in
whole or in part, of any event or circumstance which could otherwise constitute
a legal or equitable discharge or defense in whole or in part of Borrower and/or
the Guarantor (other than full payment and performance of all of the Relevant
Obligations and full payment and performance of the Guarantor's other
obligations under the Loan Documents), whether or not any one or more such
events or circumstances occur at one or more times and/or from time to time, and
whether or not with notice to, or the consent of, the Guarantor. The Guarantor
hereby absolutely, unconditionally and irrevocably consents to (without, by way
of example only, any reservation of rights on behalf of the Guarantor and
without requirement for notice to or further assent by the Guarantor, all of
which the guarantor hereby waives), and agrees that the Guarantor's obligations
hereunder shall be absolute and unconditional irrespective of, each and all of
the actions and omissions contemplated by the provisions of this section 2(b),
including, any one or more of the following:
(i) the compromise, surrender, settlement, acceleration,
rescission of acceleration, release or termination of any or all of the
Relevant Obligations;
(ii) the modification, amendment, acceleration, compromise,
renewal, extension or other supplementation of (including, the
termination of any aspect of) the Relevant Obligations or any provision
of any Loan Document (whether material or otherwise);
(iii) any failure, omission, delay or lack of diligence on the
part of Lender to enforce, assert or exercise any right, power or
remedy conferred on Lender in any Loan Document, including, any failure
by Lender to preserve any or all of its rights with respect to any
Collateral or other security securing the Relevant Obligations
(including, the actions and omissions referred to in section 2(b)(v) of
this Guaranty) or otherwise, or any other act or acts on the part of
Lender;
(iv) the release or discharge of the Guarantor from the
performance or observance of all or a portion of the Relevant
Obligations or any other agreement, covenant or other obligation
contained in any Loan Document or by operation of law;
(v) failure to perfect or continue the perfection of its
security interest or any other Lien with respect to, or to protect,
secure or insure, in whole or in part, any of the Collateral or other
security now existing or hereafter obtained in respect of the Relevant
Obligations;
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(vi) any sale, pledge, surrender, release, waiver, alteration,
exchange, or change in any Collateral or other security now existing or
hereafter obtained in respect of the Relevant Obligations;
(vii) the failure to give notice to the Guarantor of the
occurrence of a default or an Event of Default under any Loan Document;
(viii) any failure of title with respect to the interests of
any member of the Inmark Group in respect of any Collateral or other
security now existing or hereafter obtained in respect of the
Obligations;
(ix) the waiver or release by Lender of the payment,
performance or observance of any or all of the Guarantor's or
Borrower's covenants, agreements or other obligations contained in any
Loan Document;
(x) rescission of any demand made by Lender for payment of any
of the Relevant Obligations and the continuation of any Relevant
Obligations; and
(xi) (A) Any member of the Inmark Group shall have applied for
or consented to the appointment of a custodian, receiver or trustee, or
shall permit or consent to a liquidation of all or a substantial part
of any of their respective assets or properties; (B) a custodian,
receiver, trustee or liquidator for any member of the Inmark Group or
any of their respective assets or properties shall have been appointed
with or without consent of such Person; (C) any member of the Inmark
Group (1) is generally not paying its debts as they become due, (2) has
made a general assignment for the benefit of creditors, (3) has filed a
voluntary petition in bankruptcy, (4) has filed a petition or an answer
seeking reorganization or an arrangement with creditors or seeking to
take advantage of any insolvency law or to reorganize, (5) has filed an
answer admitting the material allegations of a petition in any
bankruptcy, reorganization or insolvency proceeding, or (6) has taken
any action for the purpose of effecting any of the foregoing; (D) a
petition in bankruptcy shall have been filed against any member of the
Inmark Group; (E) an order for relief for the benefit of, or with
respect to, any member of the Inmark Group has been entered under the
Federal Bankruptcy Code; (F) an order, judgment or decree shall have
been entered, without the application, approval or consent of any
member of the Inmark Group, by any court of competent jurisdiction
approving a petition seeking reorganization of any member of the Inmark
Group and appointing a receiver, trustee, custodian or liquidator of
any member of the Inmark Group or a substantial part of its assets and
properties; or (G) any member of the Inmark Group shall have suspended
the transaction of its usual business.
(c) No payment or payments made by any member of the Inmark Group or
any other Person or received or collected by Lender from any member of the
Inmark Group or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Relevant Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of the Guarantor
hereunder, except to the extent that such payment or payments constitute
indefeasible payment of the
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amount thereof to Lender. The Guarantor shall, notwithstanding any such payment
or payments, remain liable for the Relevant Obligations (to the extent not
indefeasibly paid by any member of the Inmark Group) until the date the Relevant
Obligations have been indefeasibly paid and otherwise performed in full.
(d) The Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to Lender on account of its liability hereunder,
it will notify Lender in writing that such payment is made under this Guaranty
for such purpose.
(e) The Guarantor waives and agrees not to assert any duty on the part
of Lender to disclose to the Guarantor any facts that Lender may now or
hereafter know about Borrower, regardless of whether Lender (i) has reason to
believe that any such facts materially increase the risk beyond that which the
Guarantor intends to assume, (ii) has reason to believe that such facts are
unknown to the Guarantor or (iii) has reasonable opportunity to communicate such
facts to the Guarantor. The Guarantor hereby agrees that it is fully responsible
for being and keeping informed of the condition (financial or otherwise) of
Borrower and of all circumstances bearing on the risk of the failure of Borrower
to perform its obligations under any Loan Document.
(f) The Guarantor agrees that, notwithstanding any stay, injunction or
other prohibition preventing acceleration of all or any portion of the Relevant
Obligations, such Relevant Obligations (whether or not then due and payable by
Borrower) may, at the election of Lender following the occurrence of an Event of
Default, forthwith become due and payable by the Guarantor for purposes of this
Guaranty.
(g) The Guarantor hereby waives any and all notice of the creation,
renewal, extension or accrual of any of the Relevant Obligations and notice of
or proof of reliance by Lender upon this Guaranty or acceptance of this
Guaranty, and the Relevant Obligations, and any of them shall conclusively be
deemed to have been created, contracted or incurred in reliance upon this
Guaranty, and all dealings between Borrower or the Guarantor, on the one hand,
and Lender, on the other, shall likewise be conclusively presumed to have been
had or consummated in reliance upon this Guaranty.
(h) The Guarantor hereby waives diligence, presentment, protest, demand
for payment and notice of default or nonpayment to or upon Borrower and the
Guarantor with respect to the Relevant Obligations. Without limiting the other
provisions of this section 2, this Guaranty shall be construed as a continuing,
absolute and unconditional guarantee of payment and performance without regard
to the validity, regularity or enforceability of any of the Relevant Obligations
or any other collateral security therefor or guarantee thereof or right of
offset with respect thereto at any time or from time to time held by Lender and
without regard to any defense, set-off or counterclaim which may at any time be
available to or be asserted by any member of the Inmark Group against Lender
(other than payment or performance in full of the Relevant Obligations), or by
any other circumstance whatsoever (with or without notice to or knowledge of the
Guarantor) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Relevant Obligations or the other obligations of the
Guarantor under the Loan Documents, in bankruptcy or in any other instance, and
the obligations and liabilities of the Guarantor hereunder shall not be
conditioned or contingent upon the pursuit by Lender or any other Person
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at any time of any right or remedy against Borrower, the Guarantor or any other
Person which may be or become liable in respect of all or any part of the
Relevant Obligations or against any collateral security therefor or guarantee of
or right of offset with respect thereto. This Guaranty shall remain in full
force and effect and be binding in accordance with and to the extent of its
terms upon the Guarantor and the administrators, executors, heirs, successors
and permitted assigns of the Guarantor, until the date all of the Relevant
Obligations shall have been satisfied by the indefeasible payment in full and
other performance.
(i) Notwithstanding anything to the contrary contained herein, this
Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment or performance of any of the Relevant Obligations
(whether by Borrower, the Guarantor or any other Person) or any of the
obligations of the Guarantor contained in this Guaranty is rescinded or, in the
case of payments, must otherwise be returned for any reason, including, without
limitation, the insolvency, bankruptcy or reorganization of Borrower or the
Guarantor or otherwise, all as though such payment had not been made.
3. Obligation Unconditional. Without limiting the provisions of section 2, (i)
no acts of commission or omission of any kind at any time on the part of Lender
(or its successors, assigns or transferees) with respect to any matter
whatsoever, shall in any way impair the rights of Lender to enforce this
Guaranty against the Guarantor, and (ii) no defense, right of set-off,
counterclaim, or any other similar matter of any kind or nature which the
Guarantor or Borrower has or may have against Lender shall be asserted as a
defense to the performance of this Guaranty.
4. Direct Obligation. Lender shall, in its sole discretion, have the right to
proceed first directly against the Guarantor under this Guaranty without
proceeding against Borrower and without exhausting any other rights or remedies
which it may have, including, without resorting to any other collateral or other
security held by lender. This Guaranty is a guarantee of payment and performance
and not merely of collection.
5. Subordination. The Guarantor hereby waives any and all rights which it may
acquire (a) to be subrogated to any of the rights of Lender against Borrower or
(b) to seek contribution or reimbursement from Borrower in respect of payments
made by the Guarantor, in each case prior to satisfaction in full of the
Relevant Obligations. The Guarantor hereby agrees that upon the occurrence and
during the continuance of an Event of Default, any and all of its rights and
claims against Borrower or any of Borrower's properties or revenues, however
arising, shall be subordinate and subject in right of payment to the prior
payment and satisfaction in full of all of the Relevant Obligations. If any
amount shall be paid to the Guarantor on account of such subrogation rights at
any time when all the Relevant Obligations shall not have been indefeasibly paid
in full, such amount shall be held in trust for the benefit of Lender and shall
forthwith be paid to Lender to be credited and applied to the Relevant
Obligations, whether matured or unmatured, in accordance with the terms of the
Loan Documents.
6. Benefit of and Enforcement by Lender. This Guaranty is made by the Guarantor
in favor of Lender for the benefit of Lender and its successors, assigns and
transferees, each of which shall
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be entitled to enforce performance and observance of this Guaranty to the same
extent Lender is entitled to do so.
7. Continuing Guaranty; Reinstatement of Guaranty. This Guaranty is a continuing
agreement and shall remain in full force and effect until the indefeasible
payment in full and other performance in full of the Relevant Obligations and
full performance of the Guarantor's other agreements contained in the Loan
Documents, including, all amounts payable under the Loan Documents by the
Guarantor. If any payment to Lender by the Guarantor is held to constitute a
preference or a voidable transfer under applicable state or federal laws, or if
for any other reason Lender is required to refund any one or more such payments
to the payor thereof or to pay the amount thereof to any other Person, such
payment to Lender shall not constitute a release of the Guarantor from any
liability hereunder, and the Guarantor agrees to pay such amount to Lender on
demand and agrees and acknowledges that this Guaranty shall continue to be
effective or shall be reinstated, as the case may be, to the extent of any such
payment or payments.
8. Miscellaneous.
(a) Entire Agreement. This Guaranty together with the other Loan
Documents constitute the entire agreement among the parties with respect to
their subject matter, and supersedes all prior and contemporaneous agreements,
understandings, inducements or conditions among the respective parties, whether
express or implied, oral or written.
(b) Certain Applicable Loan Agreement Provisions. Without limiting the
generality or specificity of anything in the Loan Agreement, for the avoidance
of doubt, the provisions of sections 8, 11.1 (except the first sentence
thereof), 11.2, 11.3, 11.4, 11.5, 11.8 and 11.10 and Exhibit A of the Loan
Agreement apply to this Guaranty.
IN WITNESS WHEREOF, the Guarantor, intending to be legally bound
hereby, has executed and delivered this Guaranty as of the date and year first
above written.
CoACTIVE MARKETING GROUP, INC.
By: /s/ Donald A. Bernard
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Donald A. Bernard
Executive V.P. and CFO
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